I am running the following code to initially generate a regression output:
Code:
xtreg y c.a##c.b $controlvariables i.fyear, fe
Code:
Fixed-effects (within) regression Number of obs = 11,363 Group variable: gvkey Number of groups = 1,547 R-squared: Obs per group: Within = 0.4145 min = 1 Between = 0.3950 avg = 7.3 Overall = 0.4009 max = 12 F(24,9792) = 288.80 corr(u_i, Xb) = -0.4448 Prob > F = 0.0000 ------------------------------------------------------------------------------------- y | Coefficient Std. err. t P>|t| [95% conf. interval] --------------------+---------------------------------------------------------------- a | -.8820247 1.37278 -0.64 0.521 -3.572956 1.808907 b | -.1120089 .110937 -1.01 0.313 -.3294683 .1054504 | c.a#c.b | 6.042615 2.489008 2.43 0.015 1.163646 10.92158 _cons | 13.749 1.191463 11.54 0.000 11.41348 16.08451 --------------------+---------------------------------------------------------------- sigma_u | 4.8700768 sigma_e | 2.9240485 rho | .73502736 (fraction of variance due to u_i) ------------------------------------------------------------------------------------- F test that all u_i=0: F(1546, 9792) = 2.86 Prob > F = 0.0000
Then, i run some post-estimation commands to generate an interaction plot.
margins, at(b=(0(1)1) a =(0 1))
Predictive margins Number of obs = 11,363
Model VCE: Conventional
Expression: Linear prediction, predict()
1._at: a = 0
b = 0
2._at: a = 0
b = 1
3._at: a = 1
b = 0
4._at: a = 1
b = 1
------------------------------------------------------------------------------
| Delta-method
| Margin std. err. z P>|z| [95% conf. interval]
-------------+----------------------------------------------------------------
_at |
1 | 9.605668 .028179 340.88 0.000 9.550438 9.660898
2 | 9.493659 .1150657 82.51 0.000 9.268134 9.719184
3 | 8.723643 1.379275 6.32 0.000 6.020313 11.42697
4 | 14.65425 2.704182 5.42 0.000 9.354149 19.95435
------------------------------------------------------------------------------
marginsplot
Please see attached for graph
I have the following questions!
1. The regression output shows coefficient of 13.749. In the margins command output, I was expecting the 13.749 to match where a =0 and b = 0 where the main standalone variables are zero. However, this does not seem to be true also in the marginsplot as well. Would this be because i am including control variables as well as fixed effects?
2. Based on the regression output, the effect of a depends on the value(s) b but not by themselves. I am having a little bit of trouble understanding the economic magnitude of the coefficients. Can I add the interaction coefficient to the intercept as the total effect?
3. If the interpretation in #2 is correct, then can I graph this out somehow where I can show the interaction term's 6.04 coefficient in the graph? In other words, if the intercept of 13.749 "increases" by 6.04 (interaction term coefficient), can this increase be visualized in Stata?
Thank you so much,
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